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Book of the Week

Capital Ideas Evolving

Author: Peter L. Bernstein

Difficulty

Since 1952, portfolio theory has evolved to form what we called modern portfolio theory. MPT includes various theories like efficient market hypothesis and capital asset pricing model just to name a few.

Capital Indeas Evolving not only describes these ideas, but also shows how they are implemented in day to day business.

What do Hedge Funds do?

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edge funds are privately managed pool of capital that are loosely regulated or unregulated and not widely available to the public. Generally Hedge funds focus on absolute return, their aims are to make money whatever the market does, hedging its risk or not.

A common misconception is that hedge funds hedge their risk. This is not true as hedge funds can place a bet on a specific market taking some risk in order to generate profits.

How to research stocks with financial ratios?

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hen looking for a stock to buy, relative valuation can be a good option.Most equity valuations on Wall Street are relative valuations.Almost 85% of equity research reports are based upon a multiple and comparable.

Using ratios can appear to be easy; unfortunately you cannot use only one ratio as they all have some drawbacks.The good news is that article will help you to understand various ratios and how to use them in the most efficient way.

10 Steps to make your First Investments in Financial Markets

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f you are ready to begin investing, this article will help you investing for the first time in markets.First of all, if you think that you can win huge amount of money within few days, you shouldn’t continue reading this article. As the old proverb says: Money doesn’t grow on trees.

People who are guaranteeing you astronomical return are only crooks. Bernard Madoff one of the biggest Ponzi scheme was successful over the years because he was supposed to provide investors with more than 10% performance each year during 20 years and without risk!

ETF guide

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t is very difficult to beat the market; very few managers succeed at it. If you cannot beat the market, Exchange traded funds can be a solution.
ETFs are also a good way if you don’t want to spend too much time on your portfolio.

Like mutual funds, ETFs give you direct diversification. ETFs are a basket of securities that typically track a specific market index.
Until now, ETFs were principally index funds (fund that tracks a specific index).

Today, we see the emergence of active ETFs. Because ETFs are more efficient than mutual funds, ETF are set to replace mutual funds.
Created in 1995, ETFs have seen their asset under management (AUM) exploded.

At the end of 2010, the AUM represents $1.45 Trillions.
According to McKinsey & Co, ETF assets could more than double to $4.7 trillions by 2015.